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June 27, 2012 at 12:14 AM
I really like Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim Geithner.
I don’t believe that they’re engaged in any intentional conspiracy to “help their friends.”
I honestly don’t even believe that the people in charge of the big investment companies are nasty enough to want to help their companies at the expense of the country as a whole.
I just sense that Bernanke, Geithner and the heads of the investment banks think that the scariest thought they can possibly have that doesn’t start with a natural disaster or military action is the thought of a run on a bank. Back in 2008, on crackpot, conspiracy-oriented message boards, there were rumors that the federal government was drawing up contingency plans in case financial company failures led to big bank runs, and in case the big bank runs led to riots and general chaos.
In my opinion, Bernanke, Geithner and the heads of the big financial services companies really think that the collapse of Goldman Sachs or Bank of America could lead to disorder and bloodshed.
So, the Federal Reserve Board is keeping interest rates very low, even though the low rates are clearly of no use whatsoever to anyone but big banks, big publicly traded industrial companies, and people who are making payments on bad variable-rate mortgages.
Low rates clearly do nothing whatsoever to help home sales, auto sales or retail credit card sales, because ordinary people can’t normally get credit with low rates. Ordinary first-time home buyers, and other buyers who are counting on the proceeds from the sale of their homes to help them come up with the down payments for new homes, can’t come up with the huge down payments they need to qualify for good rates, and they might not be able to get mortgage loans at all.
